Brazil's government

Exit Palocci

The president tries to cut her losses

STAY strong, urged Venezuela's leader, Hugo Chávez, as he embraced Antonio Palocci in front of politicians and photographers on a visit to Brasília on June 6th. Just a day later Mr Palocci, the embattled chief of staff of Dilma Rousseff, Brazil's president, had resigned. Newspaper revelations last month of his sudden enrichment from political consultancy while a federal congressman from 2006 to 2010 left him open to accusations of influence-peddling. The attorney-general's ruling that there was no evidence of wrongdoing merely provided face-saving cover for his inevitable exit.

His departure, less than six months into her government, is a setback for Ms Rousseff. By swiftly dumping him she has tried to limit the damage. Her choice of Gleisi Hoffmann, a newly elected senator for the ruling Workers' Party (PT), as her new chief of staff is a bold, but risky, attempt to recover the political initiative. Unlike Mr Palocci, who had close ties to Luiz Inácio Lula da Silva, Ms Rousseff's predecessor and political mentor, Ms Hoffmann owes loyalty to nobody but the president herself. “The appointment shows Lula, the PT and every government minister that the president has the courage to exercise her power and make her own choices,” says Alberto Almeida, a political analyst in São Paulo.

It was the second time Mr Palocci has left government under a cloud. As Lula's first finance minister he was credited with reinventing the former trade-unionist along more centrist lines and persuading him of the merits of fiscal responsibility. His career looked over when scandal forced him to step down in 2006—but worse scandals thinned the leading ranks of the PT to such an extent that Mr Palocci managed to make himself indispensable again. Edward Amadeo of Gávea Investimentos, a fund based in Rio, thinks that without Mr Palocci to counter the PT's left-wingers, Ms Rousseff may over time stray from the macroeconomic straight-and-narrow. But financial markets reacted calmly to his defenestration.

By appointing Mr Palocci in the first place, Ms Rousseff had sent a strong signal to investors that she could be trusted. But he had quickly morphed from an asset into a liability. He was supposed to act as the political enforcer to keep Ms Rousseff's unwieldy coalition in line. But the PT's coalition partners took advantage of his problems to press for concessions. The opposition was fast gathering support for a congressional investigation that would have dominated the airwaves for months.

The choice of Ms Hoffmann came as a complete surprise (her husband, Paulo Bernardo, the communications minister, was hot favourite). Already commentators have christened her “Dilma's Dilma”: like Ms Rousseff she is a former bureaucrat plucked from political obscurity and appointed as chief of staff because of her managerial prowess.

The corollary is that Dilma must start acting more like Lula. The best advice he could give to other leaders, Lula told The Economist last September, was not to outsource politics. “Whoever was elected must do the politics,” he said. “If he sends a proxy in his place, it won't work.” It seems that Ms Rousseff has taken that advice. She now has to show that she can be her own political enforcer.